Gen Z is Shaping the Future of Food and Beverage

Generation Z, people born after 1997, make up a quarter of the US population and will account for 40 percent of all consumers by 2020. This demographic, born after Millennials, already commands a combined buying power of $44 billion. Gen Zers are now heading into the workforce in meaningful numbers; one report estimates the group’s earnings are close to $153 billion. CPG manufacturers that begin building a relationship with Gen Z stand to reap considerable benefits as their spending power expands. After all, the tech-savvy group is set to transform the food and beverage industry.

A few facts about Gen Z:

Ninety-six percent already own a smartphone. They’re known as the iGeneration. Nearly 90 percent use Snapchat or Instagram at least once a day.

They influence $600 billion of family spending – in addition to their strong buying power.

A quarter of teens (aged 15-17) say they worry about staying healthy, and another 49 percent agree that drinking soda is unhealthy.

Sixty-one percent research products on a mobile phone at least weekly.

Their favorite items to spend money on: food and drink (36 percent) and going out with friends (32 percent).

Forty-six percent value special offers via email.

What does this mean for food manufacturers?

Gen Z is a sizable force coming in to shake up the food industry. The group has the potential to reset expectations for health and wellness, increase the reach of international cuisine and heighten kitchen creativity, according to Mintel’s latest research. They are partial to brands that are transparent, engaging and conscientious. “Generation Z was born into a foodie culture. They’re growing up with a keen understanding of the purpose for food and the role that it plays in a well-lived life. They have the potential to be perhaps the most influential generation we’ve ever seen on consumers’ eating and drinking behaviors,” said David Portalatin, food industry adviser for NPD.

AdWeek writes that brands might be misunderstood if their messages don’t communicate with Gen Zers in the right way. Companies’ need to be clear about what they stand for so that their brands are not interpreted as uninvolved in or opposed to social causes important to this generation.

Food manufacturers must recognize and adapt to Gen Z’s desire for convenience, value and quality. Take a look at these brands who are already winning over the “iGeneration”:

Doritos. One of the most successful snack foods ever, with annual sales in the US reaching $1.5 billion. Doritos understands one of its biggest demographics, male video game players, and released Doritos VR Battle, so that players could explore “Doritos caves” and fight off save monsters while trying to collect Doritos chips.

Hershey’s. Gen Z consumers are “dessert obsessed” and rank dessert as a top consideration when deciding where to go for food. Hershey’s Foodservice team learned that 87 percent of Gen Zers think about eating dessert one or more times a day. And, 52 percent of Gen Z are more likely to order an item with a branded ingredient they ate as a child. Using this knowledge, Hershey is able to offer on-trend beverages, snacks, desserts and cocktails to this cohort.

Taco Bell. The fast-food chain has created an online community through their social media, making headlines after launching promotional campaigns. Taco Bell leverages the Participation Economy, a term to describe how brands encourage consumers to be part of their brand.

Each of the aforementioned brands were ranked in YBrands’ top 10 list of most trustworthy brands among consumers 13 to 36.